Question: What money saving tips can you offer for young people?
Answer: It seems everyone from grandmothers to bankers has his or her own “secret” money saving advice to pass along to a young person.
The best thing a young person can do to ensure their financial future is to begin saving now and keep saving throughout her lifetime. It’s easy to think that retirement is far away and that you have plenty of time to plan for it, but life moves quickly and before you know it the time has come.
"The only point in making money is,
you can tell some big shot where to go."
- Humphrey Bogart |
Will you be prepared?
Saving money while you are young provides lifetime security as well as a healthy bank balance. Commit to saving for your future now, even if it seems like a hundred years away.
The power of compound interest allows you to build and expand your retirement portfolio, making it possible for you to retire sooner and in a more comfortable position than if you had waited later to begin saving.
Most people choose to wait until their income increases before they begin to save. However, your expenses will only grow as your lifestyle improves and your family grows, making it harder and harder to implement all those money saving tips you read about in the money magazines.
One way to begin planning for the future is to get in the habit early on to budget your money and to allocate a consistent portion to your savings. Keep your expenses lower than your income and do not rely on credit to make up any shortfalls.
Accruing debt at any time in your life is a big mistake. The fact is that if you save from an early age, you may be able to buy your first vehicle, even your first home, with cash. By the way, if you think college costs are huge today, imagine what it will cost in another 5 to 10 years.
By far, one of the oldest and most proven money saving tips is to “pay yourself first” each month by earmarking money for your savings.
Other money saving tips include “paying cash for all your purchases”, even the big ones. This doesn’t mean you have to carry a wallet full of 50’s and 100’s all the time, although there are some good cash-based budgets like the envelope system that do just that.
Paying cash for purchases just means that you don’t buy anything until you have the funds in hand to pay for it. Don’t buy something first with only the good intentions of paying it off early. Avoid the temptation of store credit cards and payment plans. The interest you will pay will make the purchase cost far more than the price tag says.
It’s a fact, if you plan now to save for the future and commit to paying cash for all your purchases, you should have no problem when you arrive at retirement age. You might even arrive a bit early!
Imagine, you’ll be the wise one who is passing down your own money saving tips to the next generation of young people.
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"Money is better than poverty, if only for financial reasons."
- Woody Allen |
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Debt is NOT your friend. It's not a wonderful "tool" for building wealth. That's a myth.
